The papad-making industry in South, which does sales worth hundreds of crores , has been caught unawares by the steep rise in the price of black gram.PK Krishnakumar | ET Bureau | October 28, 2015, 11:16 IST

The papad-making industry in South, which does sales worth hundreds of crores , has been caught unawares by the steep rise in the price of black gram.KOCHI: The papad-making industry in Kerala and Tamil Nadu, which does sales worth hundreds of crores annually , has been caught unawares by the steep rise in the price of black gram.

An indispensable part of daily meals in these states, papad ­ known as papadam and appalam in local language ­ is made essentially from black gram flour. Papads are fried and eaten along with rice and curry , biriyani or puttu (rice steam cake). In Kerala, marriage feasts served in banana leaves are incomplete without papad.

Many restaurants have now stopped buying papads or have started charging a price. "The restaurants are no longer serving papads free along with biriyani or rice meals. If you want it, you have to pay Rs 2 or Rs 3 for it. Soon it will be a separate menu item," said Moideenkutty Haji, secretary of the Kerala Hotel and Restaurants' Association.

The price of black gram has almost doubled to Rs 210 a kg in six weeks, forcing an industry that employs lakhs to cut production or to add alternative substances like rice flour or corn flour to offset the higher cost. "In Kerala alone there is a sale of Rs 1-1.5 crore worth of papads daily . But it has come down with orders, particularly from restaurants, shrinking," said NT Suresh Kumar, owner of Guruvayur Papads. This translates into annual sales of over Rs 500 crore.

The industry is worried price hikes will affect sales during the marriage season beginning next month.

It has already happened in Tamil Nadu. Raising the price of appalam, a variant of papad used in Tamil Nadu, has resulted in the thinning of orders. "We had no option but to increase the price from Rs 135 per kg to Rs 190 as the price of black gram escalated from around Rs 7,000 per 100 kg to Rs 16,000. But the sales have dropped. We are now working two days a week," said C Pradeep, owner of Anju Appalams in Madurai. The appalam industry in Tamil Nadu is concentrated around Mad urai, Coimbatore and Trichy with a lot of black gram powdering mills around.

Export of papads to Gulf countries has also been hit by the price increase. Huge consignments are shipped to Saudi Arabia, Kuwait and the UAE, countries where lakhs of Indians live. "We used to export 15 to 20 tonnes of appalams a month to Riyadh and Kuwait, but now we are getting fewer orders and the payments are pending," said ML Roy , purchase manager at Sumis Mercantile Company in Kochi.

This Diwali, be Ready to Shell Out More for Besan Laddoo

Although the raids on hoarders and importers by various state governments have brought down tur dal prices down by about 15% within a week, when consumers step out to purchase their kirana to celebrate Diwali after getting their salaries in the first week of next month, they may end up paying more, reports Jayashree Bhosale from Pune . With limited stocks in hand, trade insiders think that the retail prices may go up again next week as large number of consumers step out to buy."The recent raids were carried out even at the shops of small traders. As a result, tough there may not be shortage as such, the prices may go up slightly next week," said a veteran wholesaler of pulses from Maharashtra. There is so much pressure from the central government that the state authorities have sealed all the warehouses.We don't have raw material to run the mills and we can take out our goods only with the permission of the collectors," said a dal miller from Maharashtra.